A 1098 can increase your refund, but only if you itemize deductions instead of taking the standard deduction
A 1098 form reports mortgage interest, property taxes, student loan interest, or charitable contributions you made during the year. Whether it increases your refund depends on whether those deductions are worth more than the standard deduction for your filing status. If the total of your itemized deductions (including what's on the 1098) exceeds the standard deduction, you'll report them on Schedule A and may owe less tax—which means a larger refund. If they don't exceed it, you'll take the standard deduction instead, and the 1098 won't change your refund at all.
The standard deduction for 2024 is $14,600 for single filers and $29,200 for married filing jointly. If your 1098 mortgage interest alone is $8,000, plus you have $4,000 in property taxes and $3,000 in charitable donations, your total itemized deductions would be $15,000—which beats the standard deduction and would lower your tax bill. But if your total itemized deductions come to only $12,000, you'd use the standard deduction instead, and the 1098 wouldn't factor into your refund calculation.
Key Takeaways
- A 1098 increases your refund only if your total itemized deductions exceed the standard deduction for your filing status.
- The standard deduction for 2024 is $14,600 for single filers and $29,200 for married filing jointly; these amounts change each year.
- You must report itemized deductions on Schedule A and file Form 1040 to claim them instead of the standard deduction.
- If you claim the standard deduction, the 1098 does not affect your refund, even if you received one.
When a 1098 actually reduces what you owe
The 1098 reduces your taxable income only when you itemize. If you received a 1098-T (education), 1098-Q (ABLE account), or 1098-E (student loan interest), those work differently—they're above-the-line deductions that reduce your income whether you itemize or not. But a 1098 for mortgage interest or a 1098-NEC for charitable donations only helps if itemizing makes sense for you.
To know whether to itemize, add up all your deductible expenses: mortgage interest from the 1098, property taxes paid, state and local taxes (capped at $10,000), charitable donations, and medical expenses over 7.5% of your adjusted gross income. If that total is higher than the standard deduction, file Schedule A with your Form 1040 and list each deduction. The IRS will subtract that larger number from your income, lowering your tax bill and increasing your refund.
How to report a 1098 on your tax return
Your lender or organization will mail you the 1098 by January 31 each year. You'll receive Copy B (for your records) and Copy C (for your state, if applicable). The form shows the tax year in the upper left corner. When you file your federal return, you don't attach the 1098—the IRS receives Copy A directly from the issuer. But you should keep your copy for your records in case the IRS asks questions later.
If you're using tax software, enter the amounts from the 1098 into the appropriate fields when prompted. The software will calculate whether itemizing or taking the standard deduction saves you more money. If you're filing by hand, write the amounts on Schedule A (Form 1040), line by line, and attach Schedule A to your Form 1040. The total from Schedule A goes to Form 1040, where it reduces your taxable income.
What happens if you don't receive a 1098
If you paid mortgage interest, student loan interest, or made charitable donations but didn't receive a 1098, you can still claim those deductions if you have proof. Keep receipts, bank statements, cancelled checks, or credit card statements showing the payment. You can report the amount on Schedule A even without the form, though the IRS may follow up if your return is audited and ask you to show documentation.
If a lender or organization was supposed to send you a 1098 and didn't, contact them first. They may have mailed it to an old address or made an error. Ask them to issue a corrected form or a written statement of the amount. If they refuse or go out of business, document your own records and file your return with what you have. The burden is on them to report to the IRS, not on you to chase down a form you're may have access to to.
The difference between 1098 types and what each one means for your refund
| Form Type | What It Reports | Effect on Refund |
|---|---|---|
| 1098 (mortgage interest) | Interest paid on a home loan | Increases refund only if you itemize and total deductions exceed standard deduction |
| 1098-T (education) | may have access to education expenses | Reduces taxable income whether you itemize or not; may increase refund directly |
| 1098-E (student loan interest) | Interest paid on federal or private student loans | Reduces taxable income whether you itemize or not; may increase refund directly |
| 1098-Q (ABLE account) | Contributions to an ABLE savings account | Reduces taxable income whether you itemize or not; may increase refund directly |
| 1098-NEC (charitable donations) | Charitable contributions made to an organization | Increases refund only if you itemize and total deductions exceed standard deduction |
How to estimate whether a 1098 will increase your refund
Before you file, do a quick calculation. Write down the amount from your 1098, then add any other deductible expenses: property taxes, state and local taxes (up to $10,000), charitable donations, and unreimbursed medical expenses over 7.5% of your income. Compare that total to the standard deduction for your filing status. If your total is higher, itemizing will lower your tax bill and increase your refund. If it's lower, the standard deduction is better, and the 1098 won't change your refund.
Many tax software programs will calculate this for you automatically. When you enter your 1098 amounts, the software compares itemizing to the standard deduction and chooses whichever saves you more money. If you're filing by hand or want to double-check, use the IRS worksheet in the instructions for Schedule A, or use the IRS Tax Withholding Estimator on irs.gov to see a rough estimate of your refund under both scenarios.
What to do if your 1098 amount seems wrong
If the amount on your 1098 doesn't match your records, contact the issuer immediately—don't wait until after you file. Call the lender or organization and ask them to verify the figure. They may have made a data entry error, applied a payment to the wrong year, or included a fee you didn't expect. Ask them to issue a corrected 1098 if needed. The IRS receives Copy A of every 1098, so if you report a different amount on your return, the IRS may send you a notice asking why.
If you've already filed and then discover an error on the 1098, you can file an amended return using Form 1040-X. You have three years from the original due date to amend. If the corrected amount would increase your refund, filing an amendment may get you additional money. If it would increase what you owe, you can choose not to amend, though the IRS may contact you if the issuer reports a different amount.
Frequently Asked Questions
Will receiving a 1098 automatically increase my refund?
No. A 1098 increases your refund only if you itemize deductions and your total itemized deductions exceed the standard deduction. If you take the standard deduction instead, the 1098 has no effect on your refund.
What's the difference between a 1098 and a 1098-T?
A 1098 typically reports mortgage interest or charitable donations and only helps if you itemize. A 1098-T reports education expenses and reduces your taxable income whether you itemize or not, so it can increase your refund directly.
Can I claim deductions from a 1098 if I take the standard deduction?
No. If you take the standard deduction, you cannot also claim itemized deductions from a 1098. You must choose one or the other. Tax software will automatically choose whichever gives you a larger deduction.
Do I need to attach my 1098 to my tax return?
No. The IRS receives a copy directly from the issuer. Keep your copy for your records, but don't mail it with your return unless the IRS specifically asks for it during an audit.
What if the 1098 was issued to the wrong person?
Contact the issuer and ask for a corrected form. If you're married and filing jointly, the 1098 should be in the name of whoever paid the expense or whose name is on the account. If it's in the wrong name, the issuer can issue a corrected 1098 before you file.